Gold declines as dollar strengthens

Gold prices in Vietnam fell by VND50,000 a tael (1.2 ounces) on July 22 as global gold prices slipped on rising trend.

Gold was sold at VND21.15 million (US$1,187.5) and bought at VND21.05 million ($1,181.9) at most jewelry shops but trading remained low as investors expect prices to hike further.

Saigon Jewelry, the biggest gold shop in Vietnam, said it traded around 1,000 taels the previous day.

Meanwhile, gold exchange still maintained its heat with more than 222,000 tales changing hands at VND20.33-20.48 million at 9:30am local time.

The total volume of three sessions on SBJ trading floor was more than 414,000 taels yesterday.

Globally, gold declined as demand for the metal as an alternative investment slumped on the US interest- rate outlook and a rise in the dollar.

Bloomberg quoted Jon Nadler, a Kitco Inc. senior analyst in Montreal, as saying comments by the US Federal Reserve chairman, Ben S. Bernanke, halted significant progress further to the upside for now as he told Congress the central bank will keep interest rates low for “an extended period,” citing “limited inflation pressures.”

Spot gold lost ten cents to end $950 an ounce. Gold futures for August delivery slipped $1.90, 0.2 percent, to $946.90 an ounce on the New York Mercantile Exchange. Earlier, the metal rose as much as 0.5 percent.

In Asia, gold for immediate delivery declined as much as 0.2 percent to $946.84 an ounce, with the last trading session changing little at $948.10 this morning.

SPDR Gold Trust reduced its gold holdings to 1,092.41 tons after selling 2.13 tons yesterday, the company’s website showed.

The dollar recovered for the first time in three days as Bernanke was still wary of economic recovery. The exchange rate of the greenback against the euro was below $1.42 this morning in Tokyo.

Yesterday’s session marked the sixth straight increase in crude oil.

In New York, oil futures for September delivery gained $0.32 a barrel to $65.61 a barrel. Contracts for August reached $64.72 a barrel yesterday.

Oil prices, however, dropped as the US said its oil reserve rose, prompting a concern that the demand for this commodity has not recovered.

American Petroleum Institute announced the country’s crude oil holdings last week increased by 3.1 million barrels to 349.9 million barrels, while gasoline reserves also gained 1.3 million barrels to 213.6 million barrels.

Crude oil for September delivery slumped by $0.51 to $65.1 a barrel at 10:12 Vietnam time.

The State Bank of Vietnam’s fixed exchange rate of dong against the dollar was VND16,936. State-owned Vietcombank bought and sold the greenback at VND17,811.

Compiled by Thuy Doan

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